Banks slash CSR spending by 46% amid slower growth
Banks in Bangladesh have drastically cut their Corporate Social Responsibility (CSR) expenditures, with a 46% drop in the first half of this year compared to the same period last year.
Industry insiders attribute the decline to slower profit growth amid the ongoing economic crisis.
According to Bangladesh Bank data, from January to June 2024, 61 banks spent Tk 309 crore on CSR, down from Tk 571 crore during the same period in 2023.
The sharp reduction in CSR spending comes as banks grapple with rising non-performing loans. As of June 2024, defaulted loans in the banking sector stood at Tk 2 lakh 11 thousand 391 crore, accounting for 12.56% of total loans disbursed, marking the highest default rate in 16 years.
Premier Bank topped the list of CSR contributors, spending Tk 46.59 crore in the first half of 2024, a significant increase from Tk 19 crore during the same period last year. Exim Bank followed with Tk 28 crore, while Islami Bank Bangladesh allocated Tk 26 crore, a drop from Tk 47 crore in the previous year.
Other major contributors include Al-Arafah Islami Bank (Tk 21 crore), First Security Islami Bank (Tk 19 crore), Shahjalal Islami Bank (Tk 18 crore), Jamuna Bank (Tk 17 crore), Mercantile Bank (Tk 10 crore), and Dutch-Bangla Bank (Tk 9 crore). Meanwhile, six banks reported no CSR spending due to financial constraints.
Bankers said that most of the CSR funds were directed towards education, healthcare, disaster management, and climate change adaptation, as per Bangladesh Bank guidelines. These guidelines stipulate that 30% of CSR funds should be allocated to education, 30% to healthcare, and 20% to disaster management and climate change, with the remaining 20% for other sectors.
In the first six months of 2024, banks spent Tk 72 crore (23.28% of total CSR) on healthcare, Tk 64 crore (20.58%) on education, and Tk 7 crore (2.39%) on disaster management and climate change adaptation. The remaining Tk 162 crore was used for various other sectors, including Tk 138 crore for disaster management and Tk 9.6 crore for sports and cultural activities.
